FTSE lifted by miners and Unilever but AstraZeneca dips on drug setback

A rise in mining shares and a spot of merger news have combined to push the FTSE 100 ahead in early trading, but AstraZeneca has fallen back on another drug disappointment.

Shares in the pharmaceutical group are down 28p at £33.06 after it said its experimental prostate cancer pill zibotentan had failed to improve survival in clinical trials. So Astra has decided not to make any regulatory submissions for zibotnetan at the moment. The disappointment for Astra follows similar unsuccessful trials for recentin in colon cancer earlier this year and vandetanib for lung cancer in 2009. But Astra did receive a positive recommendation from European regulators for heart drug brilinta on Friday, and Brian White at Shore Capital kept his buy recommendation on the company. He said:

[The zibotentan] news extends a period of poor results for AstraZeneca's oncology franchise. Despite consensus forecasts suggesting 2015 sales in excess of $500m on a non-risk adjusted basis and some excitement (elsewhere) in the investment community about the potential for zibotentan given its novel mechanism (and some encouraging Phase II data) we felt that this was a high risk approach, especially given the negative results from Abbott's atrasentan in prostate cancer which also targeted the endothelin-A receptor. Despite the observation that zibotentan development continues in other prostate cancer settings we have not included sales of zibotentan in our forecasts.

Overall the FTSE 100 has edged up 2.05 points at 5600.53, with miners boosted by Goldman lifting its estimates and some metal price targets, including copper and nickel. Kazakhmys, where Goldman has raised its price target from £15.15 to £16.50, is up 12p at £14.33, while Anglo American - which the bank rates as one of its top buys in the sector despite cutting its target from £43.50 to £41.45 - has added 6p to £25.41.

Analysts were looking for the next bid in the food sector after reports that private equity owned United Biscuits could be sold to Shanghai-based Bright Foods. Clive Black at Shore Capital said:

Aside from general curiosity the significance of any UB deal is the read across to stocks like
Greencore (buy) with its large private label activity,
Northern Foods (hold) with its Fox's biscuits, Goodfellas pizza and private label sales and
Premier Foods (sell) with its multitude of largely ambient brands and private label grocery goods.

Northern Foods has added 0.75p to 46.5p, Premier is 0.31p higher at 17.51p and Greencore is unchanged at €1.14.